Saturday, June 8, 2013
The IRS is challenging the tax-free status of municipal bonds issued for infrastructure at The Villages retirees development in Florida, a ruling that may affect hundreds of other sellers of so-called dirt bonds.
In a memorandum [Tech. Adv. Mem. 127670-12 (May 9, 2013)], the U.S. tax agency ruled that securities issued by the Village Center Community Development District north of Orlando was not entitled to sell municipal bonds with tax-free interest payments because the entity created by billionaire developer H. Gary Morse was essentially a private entity.
- Bloomberg, Billionaire’s Florida Dirt Bonds Not Tax Exempt, IRS Says
- The Bond Buyer, IRS Rules Against Fla. CDD
- Orlando Sentinel: IRS Ruling on Villages Tax-Free Bonds a Long Time Coming